Running an electric utility is a complex task, but the basic idea is simple. Make power and send it to customers, adjust the amount of power you make as needed. Recently public Opower (UNKNOWN:OPWR.DL) is looking to apply big data to that equation, and it will make utilities vastly better along the way.

Cutting edge
Southern Company (NYSE:SO) is one of the largest electric utilities in the country. It serves 4.4 million customers across Alabama, Florida, Georgia, and Mississippi. It has some 46 megawatts of generation capacity.

And while some might think of Southern as a stodgy old utility, it isn't sitting still. For example, Southern is building two nuclear power plants and a state of the art coal plant. The Kemper coal unit is a prime example of how cutting edge Southern actually is. This plant is among the first to use coal gasification and carbon capture technology and will be one of the cleanest coal power plants in the world once it's completed.

(Source: XTUV0010, via Wikimedia Commons)

And Kemper shows the company's commitment to the future. Delays and cost overruns at Kemper were primary among the issues that left Southern's earnings down 30% last year. That's a big cost, but when the plant is complete, Southern will have decades of low-cost, environmentally friendly electricity at its disposal.

And, even with the write-offs, Southern proved that it deserves at least some of its stodgy "widows and orphans" image. It recently increased its dividend by 3.6%. This disbursement has been increased every year for over a decade.

Looking at the other side
But building cutting edge power plants isn't the only way that Southern is flirting with the latest technology. It also works with a recently public company called Opower. Opower uses a cloud-based system to track the usage patterns of utility customers. It analyzes all of the data it collects and helps utilities and customers better track and understand usage trends.

The key in this is Opower's ability to integrate its service with virtually any aspect of a utility's business. That includes mundane things like paper, but also far more exciting things like websites, email, and apps. Opower is putting the power of technology into the hands of utilities and utility customers. And all of the information it's providing can be individualized to each end user.

(Source: Visitor7, via Wikimedia Commons)

It currently sells its subscription-based service to 93 utilities around the world, including 27 of the 50 largest U.S. utilities. And adoption has been swift, between 2010 and 2013, the number of households served increased from 1.4 million to 32.1 million. With an addressable market of "1,300 electric and gas utilities worldwide, serving 650 million households and 60 million businesses" there's plenty of expansion opportunity.

Putting some numbers to this, Opower's revenues increased 80% in 2012 and 70% last year. That said, Opower is still building its technology infrastructure, so it isn't making money yet. But with long-term subscription contracts representing 90% of its business, once it hits critical mass, earnings will be building off of a solid foundation.

Young and untested
That said, Opower is clearly a young and untested company. Yes, it has deals with some of the industry's biggest players, but that doesn't mean it's going to turn into a good investment. However, Opower is at the forefront of using technology and connected devices (like an electric meter) to improve the world we live in. That's going to be a huge market, and Opower is one way to invest directly in the space.

If getting involved in a money-losing tech company is a concern, however, you can always fall back on an investment in its customers -- Southern, for example. And keep in mind that over 100 year old Southern may seem stodgy, but it's keeping itself fresh with partners like Opower and its own cutting edge investments in new nuclear and carbon capturing coal facilities. A 4.5% or so yield isn't a bad deal, either.